Market Outlook: Ahead of the Market: 10 Things That Will Decide Your Stock Trading Tuesday
The Nifty 50 index closed 0.15 per cent lower at 22442.70 points. However, the 30-member S&P BSE Sensex rose 0.02 per cent to 73,895.54 as declines in state-run banks were offset by gains in IT stocks and Kotak Mahindra Bank.
Here’s how analysts read the market pulse.
“The strategy for trading on Nifty is to sell if the low of 22348 is broken below or if Nifty bounces towards 22570 – 22620 area. In both scenarios, we expect the upside to be very limited as Nifty is unable to sustain. For short positions, a stop loss of 22700 should be maintained,” said Jatin Gedia of Sharekhan.
Shrikant Chouhan of Kotak Securities said, “We believe the near-term market structure remains weak and 22600/74400 will act as a trend-setter level for traders at present. If the market trades below the same level, we believe 22300-22250/73500-73350. On the other hand, if we break above 22600/74400, the market may bounce towards 22700-22735/74700.”That said, let’s look at some key indicators that suggest action on Tuesday.Us market
U.S. stock indexes rose on Monday as investors gauged the Federal Reserve’s chances of cutting interest rates this year following weaker-than-expected payrolls data on Friday. The benchmark S&P 500 and tech-heavy Nasdaq traded at 3-3. The weekly high comes after Friday’s data showed the U.S. central bank easing pressure to keep interest rates in place longer as U.S. employment growth slowed in April more than expected.
european stocks
European stocks closed at their highest in a week on Monday, with investor optimism over interest rate cuts by major central banks taking the lead again, while Spanish defense company Indra surged on the back of strong first-quarter profits.
The pan-European STOXX 600 index closed 0.5% higher, with the insurance sector leading the gains with a 1.6% gain. UK stocks were closed for the bank holiday.
Tech View: Internal Bar Pattern
Nifty on Monday closed 33 points lower to form an inside bar pattern on the daily chart as India VIX recorded a surge of over 13%.
“One should wait and watch for a high (22,589) or low (22,409) for further direction of Nifty. Support for Nifty is now seen at 22,350 and 22,200-250 levels. On the higher side, Nifty’s immediate resistance area is 22,600-625 levels and the next resistance area is 22,800 mark. Overall, Nifty is likely to remain volatile within the 22,200-22,800 range in the near term with a negative bias, said Tejas Shah, head of technical research at JM Financial & BlinkX.
Stocks with a bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trading on the counters of Radico Khaitan, APL Apollo Tubes, Triveni Turbine, Fortis Healthcare and Zydus Lifesciences.
MACD is known to indicate a trend reversal in a traded security or index. When the MACD crosses above the signal line, it sends a bullish signal, indicating that the price of the security may rise and vice versa.
Stocks that signal weakness from now on
MACD showed signs of weakness on the counters Info Edge (India), DOMS Industries, Craftsman Automation, Blue Star, Safari Industries and Aavas Financiers. A bearish crossover in the MACD of this counter indicates that it has just begun its downward journey.
Most Active Stocks by Value
Kotak Bank (Rs 3,494 crore), SBI (Rs 2,856 crore), Titan Company (Rs 2,288 crore), HDFC Bank (Rs 2,196 crore), ICICI Bank (Rs 1,719 crore), Coal India (Rs 1,686 crore) and Britannia (Rs 1,429 crore) was one of the most active stocks on the NSE in terms of value. The higher activity of a counter in terms of value can help identify which counters have the highest turnover for the day.
Most active stocks by trading volume
Tata Steel (traded shares: KRW 3.7 billion), Coal India (traded shares: KRW 3.6 billion), SBI (traded shares: KRW 3.5 billion), Kotak Bank (traded shares: KRW 2.1 billion), Power Grid (traded shares: KRW 1.6 billion), ONGC (Shares traded: $1.5 billion), NTPC (Shares traded: $1.5 billion), etc. were among the most traded stocks in the NSE session.
Stocks showing interest in buying
Stocks such as Godrej Properties, Brigade Enterprises, Rainbow Children’s Medicare, Prestige Estate, Supreme Industries, Asahi India Glass, Sterling and Wilson Renewable, etc. saw strong buying interest from market participants as they touched new 52-week highs, indicating bullish sentiment.
Stocks under selling pressure
Zee Entertainment Enterprises stock price hit a 52-week low, indicating bearish sentiment in the market.
Sentiment Meter Favors Bears
Overall, market breadth favored the bears, with 2,726 stocks ending in the red and 1,207 stocks ending in the green.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not represent the views of The Economic Times.)
